Topic: CD-R will go up BCOZ of EVAT?

[snapy]

teka nga pala.. tataas ba cd dahil 12% na?
ano kaya sa tingin ninyo?

will price be affected or not?

[elvenears]

sa tingin ko hindi kasi illegal di naman na pinapasok yung iba nyan dito!!! ;Dparang pirated din

[p.dividdy2]

kapag tumaas ang e-vat ng 12% natural tataas ang presyo by 2% ng lahat ng bilihin na may vat..in short lahat ng bilihin at serbisyo! maski di under evat tataas din sigurado

[barrister]

For retail enterprises, ang matinding factor ay ang VAT credit cap, hindi ang 2% VAT increase.

Section 8 of RA 9337 (the new VAT law) states:

"(B) Excess Output or Input Tax. – If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters: Provided, That the input tax inclusive of input VAT carried over from the previous quarter that may be credited in every quarter shall not exceed seventy percent (70%) of the output VAT: Provided, however, That any input tax attributable to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112." (emphasis supplied)

VAT payable is computed by deducting input (purchases) VAT from output (sales) VAT.

Contrary to popular belief, 1/11 of Gross Sales is not the VAT payable  --  it's only the output VAT.  In order to compute VAT payable, the formula is output VAT less input VAT.  Hence, it is possible to have zero VAT payable for the quarter where output VAT is less than or equal to input VAT.

But under section 110 (B) of the Tax Code, as amended by section 8 of RA 9337 (also referred to as the "VAT credit cap"), hindi na puwede yan ngayon.  The minimum VAT payable per quarter is now 30% of the quarter's output VAT. 

It might not seem much, but it's actually a HUGE amount for small retailers.  Maliit lang ang 2% increase sa former 10% VAT dahil may credit naman sa input VAT, na 12% din naman ang basis.  Pero dahil sa VAT credit cap, matindi talaga ang epekto ng bagong VAT law.

[snapy]

For retail enterprises, ang matinding factor ay ang VAT credit cap, hindi ang 2% VAT increase.

Section 8 of RA 9337 (the new VAT law) states:

"(B) Excess Output or Input Tax. – If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters: Provided, That the input tax inclusive of input VAT carried over from the previous quarter that may be credited in every quarter shall not exceed seventy percent (70%) of the output VAT: Provided, however, That any input tax attributable to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112." (emphasis supplied)

VAT payable is computed by deducting input (purchases) VAT from output (sales) VAT.

Contrary to popular belief, 1/11 of Gross Sales is not the VAT payable  --  it's only the output VAT.  In order to compute VAT payable, the formula is output VAT less input VAT.  Hence, it is possible to have zero VAT payable for the quarter where output VAT is less than or equal to input VAT.

But under section 110 (B) of the Tax Code, as amended by section 8 of RA 9337 (also referred to as the "VAT credit cap"), hindi na puwede yan ngayon.  The minimum VAT payable per quarter is now 30% of the quarter's output VAT. 

It might not seem much, but it's actually a HUGE amount for small retailers.  Maliit lang ang 2% increase sa former 10% VAT dahil may credit naman sa input VAT, na 12% din naman ang basis.  Pero dahil sa VAT credit cap, matindi talaga ang epekto ng bagong VAT law.

so what would you think.. cdr will increase by piso? or by cents lang?

[d00dZ]

For retail enterprises, ang matinding factor ay ang VAT credit cap, hindi ang 2% VAT increase.

Section 8 of RA 9337 (the new VAT law) states:

"(B) Excess Output or Input Tax. – If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters: Provided, That the input tax inclusive of input VAT carried over from the previous quarter that may be credited in every quarter shall not exceed seventy percent (70%) of the output VAT: Provided, however, That any input tax attributable to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112." (emphasis supplied)

VAT payable is computed by deducting input (purchases) VAT from output (sales) VAT.

Contrary to popular belief, 1/11 of Gross Sales is not the VAT payable  --  it's only the output VAT.  In order to compute VAT payable, the formula is output VAT less input VAT.  Hence, it is possible to have zero VAT payable for the quarter where output VAT is less than or equal to input VAT.

But under section 110 (B) of the Tax Code, as amended by section 8 of RA 9337 (also referred to as the "VAT credit cap"), hindi na puwede yan ngayon.  The minimum VAT payable per quarter is now 30% of the quarter's output VAT. 

It might not seem much, but it's actually a HUGE amount for small retailers.  Maliit lang ang 2% increase sa former 10% VAT dahil may credit naman sa input VAT, na 12% din naman ang basis.  Pero dahil sa VAT credit cap, matindi talaga ang epekto ng bagong VAT law.

The 70% cap will only apply for any particular quarter where input tax exceeds output tax. Refer to Revenue Regulations (RR) No. 14-2005 as amended by RR 16-2005.

The law was originally drafted with the intention of having all VAT-registered taxpayers pay a minimum of 30% of output VAT, or effectively 3% of VAT-subject sales. Gusto kasi nila pantayan ang 3% gross receipts tax. Eng-eng kasi tong mga taga-legislative di nila naisip that not all industries are similarly situated. Some industries do incur higher input taxes than others, kaya sila talaga tatamaan nitong cap na to.

That is why tax practitioners lobied for the more lenient, but admittedly legally incorrect, interpretation of the RVAT, which fortunately the BIR agreed to implement through its RRs. So it is still possible for a VAT taxpayer to have a VAT liability at less than 30% of total output VAT, provided their total input VAT for the quarter does not exceed total output VAT. Think of the case where output VAT is 100 and input VAT is 99, net VAT payable is only 1. But if output is 100, input is 101, tatamaan ka na ng cap.

Retailers may not be hit heavily by the 70% cap if they plan their purchases well, like if they incur sufficient input only to offset their current quarter's output.

Prices will not increase by 2% outright. They will only increase by 1.81% (i.e., 2%/110%) at most. Economics will still come into play, though. As in price sensitivity nating mga mamimili will eventually be factored in. So business may absorb some of the increased cost by lowering their base prices if they want to maintain sales volumes.

[barrister]

Thanks very much to sir doodZ for the very helpful info. 

RR No. 14-2005 contained the correct interpretation, but was fortunately superseded by the liberal (although obviously incorrect) interpretation under RR No. 16-2005 .

Hindi ko ma-access ang BIR download ng RR 16-2005; may sira yata ang site nila.  Baka naman may alam kang ibang link.  Thanks again.

[d00dZ]

As to the question of whether CD-R will go up, the answer is yes, it should. The same as with any other consumer good. 

VAT is a tax on consumption. The burden of the tax is ultimately borne by us, the consumers. The method of collection, however, is through the input-output system. Kaya ang mga retailers na ang nag-papatong ng VAT para problema na nila mag-remit ng tax na tayo ang sumasalo.

VAT is not a business tax. It only appears that way. Say for example, our CD-R retailer has only one transaction for the quarter with the following facts:
Purchase price: P5.50, VAT inclusive
Selling price: P11.00, VAT inclusive
At the end of the quarter he remits P0.50 to the BIR (P1.00 output less P0.50 input), then pockets the P5.00 profit.

E kung walang VAT:
Purchase price: P5.00
Selling price: P10.00
In this case, he likewise pockets P5.00!

The VAT law, prior to amendment, was already good enough. The real problem was, or should I say is, leakages. And of course, you can trace leakage to compliance by... janjararan... us, the consumers who happen to work for these companies in the middle of the supply chain who do not comply with the VAT law. Kaya naisip nila itaas ang VAT rate na lang dahil mas madali i-monitor ang retail kesa all other industries in between as your purchased item is transformed from raw material to consumer good.

Sir barrister, just glad to share what I know. I believe you must be a lawyer. Ako ay hamak na akawntant lang po. I can send you a PDF version of RR 16-2005 through email if you want.

[snapy]

As to the question of whether CD-R will go up, the answer is yes, it should. The same as with any other consumer good. 

VAT is a tax on consumption. The burden of the tax is ultimately borne by us, the consumers. The method of collection, however, is through the input-output system. Kaya ang mga retailers na ang nag-papatong ng VAT para problema na nila mag-remit ng tax na tayo ang sumasalo.

VAT is not a business tax. It only appears that way. Say for example, our CD-R retailer has only one transaction for the quarter with the following facts:
Purchase price: P5.50, VAT inclusive
Selling price: P11.00, VAT inclusive
At the end of the quarter he remits P0.50 to the BIR (P1.00 output less P0.50 input), then pockets the P5.00 profit.

E kung walang VAT:
Purchase price: P5.00
Selling price: P10.00
In this case, he likewise pockets P5.00!

The VAT law, prior to amendment, was already good enough. The real problem was, or should I say is, leakages. And of course, you can trace leakage to compliance by... janjararan... us, the consumers who happen to work for these companies in the middle of the supply chain who do not comply with the VAT law. Kaya naisip nila itaas ang VAT rate na lang dahil mas madali i-monitor ang retail kesa all other industries in between as your purchased item is transformed from raw material to consumer good.

Sir barrister, just glad to share what I know. I believe you must be a lawyer. Ako ay hamak na akawntant lang po. I can send you a PDF version of RR 16-2005 through email if you want.

so... ano kaya sa tinign ninyo... PAKYAWIN NA MGA CD.. ubusin na bago tumaas..

[barrister]

Bos dOOdZ, you 've been a big help.  I just got a pdf copy of RR No. 16-2005 from vatreform.gov.ph thanks to your valuable inputs.

Yes, lawyer nga ako, practicing civil litigation.  Pero panyero din tayo dahil CPA din ako, although I no longer practice the accounting profession.  

I'm sure that you're a tax specialist since only tax practitioners can update themselves with the BIR's vouminous RRs, RMCs, RMOs and RBs.  Meron na naman daw bagong RMC 6-2006 exempting input taxes as of October 31, 2005 from the 70% cap.  Grabe. Only you guys can keep up with their regulations.

Back to the topic, tataas talaga ang presyo ng CD, bakit hindi.  Wala namang masama na ipasa ng seller ang VAT sa consumer dahil iyon naman talaga ang design and intention ng VAT.  

so... ano kaya sa tinign ninyo... PAKYAWIN NA MGA CD.. ubusin na bago tumaas..

Korek! 
 

[snapy]

Bos dOOdZ, you 've been a big help.  I just got a pdf copy of RR No. 16-2005 from vatreform.gov.ph thanks to your valuable inputs.

Yes, lawyer nga ako, practicing civil litigation.  Pero panyero din tayo dahil CPA din ako, although I no longer practice the accounting profession.  

I'm sure that you're a tax specialist since only tax practitioners can update themselves with the BIR's vouminous RRs, RMCs, RMOs and RBs.  Meron na naman daw bagong RMC 6-2006 exempting input taxes as of October 31, 2005 from the 70% cap.  Grabe. Only you guys can keep up with their regulations.

Back to the topic, tataas talaga ang presyo ng CD, bakit hindi.  Wala namang masama na ipasa ng seller ang VAT sa consumer dahil iyon naman talaga ang design and intention ng VAT.  

Korek! 
 

ah .. teka barister.. lawyer ka pala? meron ka bang YM para magusap tayo tungkol sa law.. may tatanungin akong batas seriously.. can i contact u?

[barrister]

Sure, bosing.  I'm always willing to help. You've got mail @ yahoo.com

[snapy]

[email protected]
http://rapidshare.de/files/12216466/Dddd.doc.html

[snapy]

as of today.. tumaas na ba ung cd? can you put any info on that?

[p.dividdy2]

no galing lang ako today no increase they will absorb the 2%!  malamang temporary lang yan after a month makikita niya ang kita liliit magtataas din siya

[snapy]

no galing lang ako today no increase they will absorb the 2%!  malamang temporary lang yan after a month makikita niya ang kita liliit magtataas din siya

maybe bka nxt month baka tumaas.. sa smart eload nga biglang taas e..
pero di ko lang alam strategy nila.. baka inuubos lang stock nila.. or baka sa competensya
kaya ayaw din nila magtaas..

iniintay nila siguro other shops bago magtaas..

[p.dividdy2]

but going around the mall wala pa naman nagpapalit ng mga presyo kfc lang dun sa P1 taas dun sa ricebowl and i think the small sandwich.. eheheh halata dahil tinakpan lang nila ng papel tapos nagprint sa computer ng bagong price